You may not have the “Coke Formula” in your business, but you almost certainly have “trade secrets” which you can protect under the law. Trade secrets can be almost anything a company (1) keeps secret and (2) has value because of its secrecy. Customer lists and key contact information, customer needs, pricing, and market information seem to be the main “secrets” people sue about. But almost anything kept secret and valuable could be a “trade secret.”
You have strong rights to stop a different company from taking or using your trade secrets.
Texas law provides a “trade secret” includes:
all forms and types of information, including business, scientific, technical, economic, or engineering information, and any formula, design, prototype, pattern, plan, compilation, program device, program, code, device, method, technique, process, procedure, financial data, or list of actual or potential customers or suppliers, whether tangible or intangible and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing if:
(A) the owner of the trade secret has taken reasonable measures under the circumstances to keep the information secret; and
(B) the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, another person who can obtain economic value from the disclosure or use of the information.
Note the bolded, underlined section above. A requirement for protection of a “trade secret” is “secrecy.” There is no protection for non-confidential “trade information.” Thus, it is vital to take steps to keep your actual trade secrets confidential.
Confidentiality/Non-Disclosure agreements are a good first step to help protect your secrets and stop competitors/departing employees from using them.
The “trade secret” analysis involves whether an owner has taken “reasonable” steps to preserve the secrecy of a “trade secret.” Failure to use a Non-Disclosure/Confidentiality Agreement can be fatal to the argument a trade secret is “secret.” Accordingly, any employer interested in preserving the value of its trade secrets should implement a Non-Disclosure/Confidentiality Agreement tailored to the needs of the company. Also – you should genuinely limit access to your secrets only to those employees who “need to know.”
I draft confidentiality / non-disclosure agreements and represent clients in trade secret lawsuits.
Using sound confidentiality/non-disclosure agreements is the first (fantastic) step in shielding your trade secrets from theft – actually enforcing the agreement in Court is another important layer in protecting your secrets. If you need advice concerning confidentiality and non-disclosure agreements or trade secrets, feel free to call me to consult on the issue.